Ross Wilson

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  • US-Azerbaijan Relations and Outlook for the South Caucasus: Transcript - 12/22/11

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    The Atlantic Council of the United States

    U.S.-Azerbaijan Relations and Outlook for the South Caucasus

    Welcome and Moderator:
    Ross Wilson,
    Patriciu Eurasia Center

    Araz Azimov,
    Deputy Minister of Foreign Affairs,
    Republic of Azerbaijan

    Location: Washington, D.C.

    Time: 9:00 a.m. EST
    Date: Thursday, December 22, 2011 

    Transcript by
    Federal News Service
    Washington, D.C.

    ROSS WILSON: Good morning to everyone. For those of you who don’t know me, I’m Ross Wilson. I’m the director of the Eurasia Center here at the Atlantic Council. And a special welcome to our principal guest, deputy foreign minister and ambassador of the Republic of Azerbaijan, Araz Azimov.

    I believe that this is the Atlantic Council’s last event of this year. I can’t think of a better candidate for that honor than Azerbaijan, one of my favorite countries, where I had the privilege of serving, representing the United States for three years. We’re delighted to have with us Deputy Foreign Minister Azimov. I think we will have Azerbaijan’s new ambassador to the United States who arrived just a few weeks ago. I’m also very pleased to welcome two predecessors in Baku, Ambassador Richard Kauzlarich, Ambassador Richard Miles – obviously, also long-time friends of Azerbaijan, people who care – join me in caring deeply about the fate of this country.

    Twenty years ago, the world witnessed a momentous set of events – the collapse of one of the world’s great imperial empires, perhaps the first time in history, as Secretary Gates noted at an Atlantic Council function last week, first time in history that such a great and powerful empire fell without a shot. It wasn’t exactly without a shot. There were some fired, I think, in Azerbaijan in the run-up to December 1991, in Georgia, elsewhere in the former Soviet Union.

    Like other new independent states, Azerbaijan faced staggering problems on re-attaining its independence. Some of those problems were similar to those of the other new independent states, some of them were unique. Azeri leaders had to face the task of creating, out of the rudiments of the old Soviet Republic of Azerbaijan, the institutions of a new independent state. They had to refashion an economy also out of the ruins of the old Soviet economy, establish relationships with the outside world and with its new independent neighbors. And there, I think Azerbaijan faced some unique issues, in terms of its ethnic kinsmen to the south in Iran and, of course, the large ethnic Armenian population in Nagorno-Karabakh, that it started to rebel even a couple of years before the Soviet Union fell.

    Our guest today, Ambassador Araz Azimov, has played a formative role in the foreign policy of Azerbaijan for nearly all of this period, including in a variety of positions at the Azerbaijan Foreign Ministry, especially as Azerbaijan’s deputy foreign minister since 1994. His duties have been wide-ranging. He had a lot to do with – has had a lot to do with U.S.-Azerbaijan relations, responsibilities for political and security issues and, of course, for negotiations on the Nagorno-Karabakh conflict.

    One things that diplomats do when they serve in a foreign country is they try to find people in positions of authority to whom they can turn when there are really big problems or really urgent problems, at least, for whom they need urgent help – a kind of go-to guy. Araz Azimov was one of those individuals for me. I’m very grateful to the help that you gave to me and to my predecessors, and I assume also to my successors, in solving some of those urgent, if not always important but sometimes important, problems that have come up. I want also to – just to note that Ambassador Azimov has been, in the three years that I served in Baku – and I think my predecessors would share this sentiment – a patriot who has represented his country well and effectively and has been a friend to many of us in the room.

    Our format today is relatively simple. Ambassador Azimov will make some remarks, I hope, looking back a little bit on the last 20 years on this anniversary of Azerbaijan’s independence, give us Azerbaijan’s perspective on some of the critical issues that face it and face the region, and talk specifically about some of the matters in U.S.-Azerbaijan relations. Our ambassador to Baku, unfortunately, will be returning to Washington, I assume, in the coming several days, and that’s not a positive development in U.S.-Azerbaijan relations – there are, I certainly hope, some other – some other more positive matters also to talk about – and update us a little bit on the – on the status of the negotiations over Karabakh and on other matters on your agenda. That should leave plenty of time for questions, so please be thinking of what you would like to ask. Ambassador Azimov.

    ARAZ AZIMOV: Well, thank you. Thank you, first of all. It’s too loud (probably, yeah ?). Thank you for these – a warm introduction and welcome remarks. Ross, it’s a pleasure to see you and other old friends from Baku. It’s a pleasure to be in Washington back again and being a guest of your institution. It seems to me that you gave me a mission impossible to implement in terms of speaking about all 20 years of independence in some odd 15 minutes and still to leave you plenty of time for questions. But still, I would dwell on certain several issues.

    First, 20 years of – last 20 years of the history of Azerbaijan were, of course, part of my life as well. I joined the ministry in 1989. And I was quite fortunate in being involved in all this, although troublesome and very difficult issues, but then after all important and some of them successfully dealt with. So I’m looking back to these 20 years with a sense of satisfaction. At the same time, I understand that there are some difficult issues yet to be solved and remaining on the table, but those are not of a kind which – of a kind of issue which you cannot deal with. Those issues are not impossible for Azerbaijan, and I hope that we shall overcome them. I hope that – I’m sure that we shall solve them.

    Probably 20 years and these two decades took Azerbaijan through many challenges including, first of all, finding its own priorities, its own national interest, formulating its foreign policy, and going – taking this challenge of identifying the directions of where to go and what to do. In the beginning of 1990s and ’91, where this process started through recognition of Azerbaijan by many countries, including United States, and working with newly assigned ambassadors to Baku, we were trying to identify the priorities. And I think priority of Azerbaijan for that time was, first of all, to change the dimension of the region and to use the historical opportunity which was given by the chance of collapse of Soviet Union, and to use this historical opportunity effectively, because we have had such a chance in the beginning of 20th century; we missed that opportunity not because of our ineffectiveness, but because of outside pressures. So this time Azerbaijan, A, is successful; B, process which we have conducted and we have carried out through has become irreversible; and C, we think that prospectives that Azerbaijan has are bright.

    At the same time, there are many challenges. And challenges on the table are still demanding the attention not only of Azerbaijan, but of our close partners, among which, I think, United States occupies the most important (way ?). So that’s why I’m trying once per year, at least, to come to Washington and to discuss the ways – how are we going to cooperate, and how are we going to find the solutions to those outstanding issues.

    The last accomplishment, last achievement of Azerbaijan’s foreign policy, which in a way marked 20th anniversary of Azerbaijan, and that was an election of Azerbaijan to United Nations Security Council, has been specific purpose which brought me this time to Washington. Our membership to UNSC as elected member for two years, representing the Eastern European group there, is an important opportunity. The matter is that two years are very short time in terms of a normal activity. And you have to use this two years in a most effective way, A, and B, in a way to have outcomes and implications and continued prospectives after these two years.

    On the other hand, the agenda of UNSC is rather challenging and, in many ways, coming closer to Azerbaijan’s neighborhood, coming – in a way, touching Azerbaijan’s interests. And therefore, consultations, which I had yesterday and will continue today with my colleagues in State Department and other institutions, are very important because we try to find those common grounds for coordination, cooperation between two countries. United States has a different scale of interests, of course, as a – as a global power and as a P-5 member. At the same time, United States is very close and attentive to the issues of the neighborhoods of Azerbaijan.

    In a way, UNSC issues are coming across the agenda of regional dimension. And in terms of regional dimension, there are certain threats of proliferation or terrorism or illegal activities or drugs-trafficking crisis in some neighboring countries. In some countries, we have peacekeeping operations. In some, forces are going to be withdrawn very soon. So all these issues are coming at the table of UNSC in a time when Azerbaijan becomes a member.

    At the same time, you know, that Azerbaijan is a member of Islamic organization – Islamic Cooperation Organization. And being one of most advanced and moderate Islamic countries, Azerbaijan has a nice opportunity in providing a bridge between United States and Islamic world, in giving more understanding to the positions of Islamic countries on one hand, and trying to enrich the opportunities of cooperation in dealing with the issues on the – on the agenda of UNSC. So in some cases, I think Azerbaijan represents quite a useful partner, in some cases, unavoidable partner for United States.

    Through these 20 years, of course, speaking about accomplishments and achievements, I cannot avoid the issue of energy, and energy being part of foreign policy as well as national policy, as well as factor of economic development of Azerbaijan and some other countries in the region; represents both a set of opportunities, at the same time, being subjected to certain challenges.

    And you know that we have managed to – in your time and time of your predecessors who have managed to do a lot in taking, first of all, eastern-western orientation for the transportation of energy resources or the Azerbaijani national sector in the Caspian Sea. Taking that very difficult, at the same time, strategic decision, Azerbaijan has paid a heavy price for that. You remember the events in 1994, the sequence of events in ’94, which was marked in the end of that in September 20th with the signing of oil contract called “contract of the century.”

    But more difficult decisions were yet to be taken – decisions on the transportation of those resources – and that was most important in – because it’s one part of deal to exploit resources, and the greater deal is to provide its transit. And I think, in general, the decision which has been taken by Azerbaijan, a irreversible decision, on integration of East to West, on connection between Azerbaijan and Europe, on transit of energy resources of Azerbaijan to European markets, on integration of Azerbaijan into Euro-Atlantic institutions – all these decisions are interconnected, all these decision come together in one consolidated concept of Azerbaijan’s foreign policy.

    While we have been challenged, as I said, in 1994 we have been compelled by a situation developing on the ground in the conflict zone to conclude – to take a decision on cease-fire and to follow up with negotiations, which unfortunately go further on and on, still without any result. And probably, here we have another anniversary which would be rather sad to be marked on 24th of March of 2012, 20th anniversary of the Minsk Process, with ambassadors coming in and out, with negotiations changing places, with maybe different formats being used, and with different phraseology covering actually lack of success so far. This is the biggest trouble of this process.

    What should be done or what could be done? Do we have a resource for that? Well, certainly after events of August 2008 when Georgia’s territories were occupied, this event has changed the paradigm of presences and of interests and connections in the region of the South Caucasus. Some Western countries thought that the issue is done and the South Caucasus is off the agenda. Some are feeling fatigue of this, and try to take a more neutral or, let’s say, hesitant position, ignorant position.

    Coming to U.S., I usually try to draw the attention of Washington to the matter of fact that this conflict is not a conflict which would stop development of Azerbaijan. Azerbaijan’s development is irreversible. Sovereignty is irreversible. Independence is an achievement which will be defended. At the same time, territorial integrity matters. And of course, the government of Azerbaijan, under whatever circumstances, would consider as a priority the restoration of the territorial integrity of the country. We have given our formulas. We have given our proposals. We have participated in all rounds of negotiations. And we are going to continue that, although we have a sad feeling of ineffectiveness of these approaches.

    We don’t think that now the attendance of United States to this Minsk Group and to the Minsk activities is adequate to the situation. Since August 2008, it has been more declining from taking active stance on the issues. Some trends, in general, Euro-Atlantic context and OSCE context make me feeling even more frustrated. With Astana Summit declaration of December 2010, we learned something new about OSCE geography.

    Now there is – despite we are used to now, since 1975 and since ’92 when we joined OSCE, or at that time CSCE was the term – we have been committed to this position of indivisibility of OSCE area from Vancouver to Vladivostok.

    Nowadays we learn that there are Euro-Atlantic and Eurasian parts of OSCE area, within which Euro-Atlantic and Eurasian institutions – security-related institutions – will cooperate using OSCE as a framework. That makes me concerned. That makes me kind of thrown back into reminisces of the past, with bipolar system of NATO and Warsaw Pact. Now Warsaw Pact will be replaced by CSTO.

    For countries like Azerbaijan, Georgia – I see my friend – (name inaudible) – here – for Ukraine, probably, or others, who have no – the – for the time being, no reason to consider a realistic opportunity of a membership in Euro-Atlantic community, and on the other hand having a strong reason to exclude any possibility to – in membership for – to CSTO, like, Collective Security Treaty Organization – this status of affairs becomes quite vacuum-like. It creates a feeling of isolation or nonalliance.

    So aren’t we nonaligned members of European community? Shouldn’t we think about a new status? Shouldn’t we elaborate a new pattern of cooperation between Euro-Atlantic community, let’s say, and Azerbaijan or Georgia? While memberships are not possible – and August 2008 proved this – while at the same time CSTO is not liked and, let’s say, is not welcomed – at least because of the fact that one of the members of CSTO occupies 20 percent of territories of Azerbaijan or (either ?) of Georgia – we cannot consider that as an opportunity.

    Therefore, looking into possible ways of dealing with this issue – looking into possibilities of providing some kind of security commitments, some kind of security assurances – shouldn’t we think about new pattern of relationship between a country and NATO as a Euro-Atlantic community, as a Euro-Atlantic union collective defense organization?

    I wouldn’t say that that should immediately involve the Article 5 of Washington treaty. I’m not that naïve. At the same time, I think that both sides – NATO and Azerbaijan – may have mutually needed, mutually demanded assets which can reciprocate, and which can compensate and contribute, into interests of each other – be it fighting terrorism, providing transit, fighting organized crime, helping countries in providing border controls, fighting drugs trafficking, let’s say participating at peacekeeping operations elsewhere.

    This is something which should be considered urgently, because otherwise the situation in the region would be imbalanced, or would be taken out of at least currently visible balance of interests. On the other hand, you ask me to elaborate on – a bit on the Minsk Process, and I think what we observe in OSCE, and what I shortly have described to you, is having its repercussions in the Minsk Process as well.

    For Azerbaijan it always has been important to have OSCE as a major organization – umbrella organization for settlement of the conflict – A, because OSCE is multinational organization, European values- and principles-based organization; Helsinki Final Act is an important pillar element of this institution; B, OSCE is based on consensus, and therefore small nations are guaranteed against any decision to be taken out of context of their interests; C, we always have been in favor of developing certain capacities in OSCE for dealing with these issues.

    Minsk Group – as an institution composed of some, what, 11, 12 countries – is quite suitable, is quite fitting format for taking process of negotiations forward. But I would say that, from my point of view, the process of negotiations has been subjected on one hand to geopolitical competition of some major players in the Minsk Group, keeping other important players – regional players, European players – outside of the game.

    Second, Minsk Group has been subjected to different influences of side events, let’s say – of side (processes ?) going on. And probably Minsk Group has been driven in a direction of neglection (ph) of, first of all, major pillar or founding principles of negotiations. Negotiations cannot be based on fait accompli; negotiations cannot be conducted by a logic of twisting arms of the other side. A necessary education is to be made; principles have to be introduced and followed up by, observed by – first of all, by mediators.

    On the other hand, I’m dissatisfied with the current trend in OSCE where, since ’92, my first summit in OSCE – CSCE that time – for me it was important because we had withdrawn Kornblum, your ambassador to CSCE that time. We have paid many efforts, and we got a desired result in creating a capacity of CSCE for peacekeeping and for crisis management and for conflict resolution.

    In a way I am – I am coming to Washington from Vilnius on 5th, 6th December. We have had Vilnius ministerial COSCE meeting where we tried a lot to retain back these elements of 1992. We tried a lot to explain countries that peacekeeping of COSCE is important tool to be practically used – and maybe in a most immediate future, in a day X when a conclusion of agreement would take place.

    Countries – parties to the conflict will need this guarantee that this engagement will be done, that forces – peacekeeping force will be in place, that parties which have zero trust level relationship would be comfortable in taking withdrawals from occupied positions. And the role of CSCE peacekeeping – OSCE peacekeeping is tremendous there. But I’ve spent a lot of efforts in getting these formulas back again restored in the text. We did it, in a way, in Vilnius, but I think it’s not end of game. I think my opponents in OSCE would continue that.

    But, let’s say, if they succeed, and I fail, and we lose OSCE peacekeeping, what would be a substitute for that? What kind of tool you would suggest to me? While NATO is not able to come to the South Caucasus – and CSTO is not desired by us, and would not be acceptable, for the reasons I explained – they are not, in our eyes, unbiased, impartial, multinational, peacekeeping-prepared and standard-trained force. It’s a usual force of one country, which is being used for certain purposes, politically motivated and covered by peacekeeping mandate.

    There are many issues which we could discuss in terms of UNSC as well, but the major issue is, who remains on the market in providing these tools? And would that be – wouldn’t that be subjected, then, to a continued geopolitical dispute over the mastership in the South Caucasus, where Karabakh conflict is being used as a – (inaudible) – now?

    It’s a not – it’s not a big deal, the issue of small part of population, now something like 30,000 people. It’s not a deal of separation; separation here simply is not possible, and within the international law, such a concept would be considered as ridiculous. The deal is about – the issue is about the strategy of the South Caucasus. With certain situations taking place after August 2008, with certain deployments, with certain prolongations and extensions of mandates, et cetera, I think we have only Azerbaijan as a remaining island of predictable and reliable Euro-Atlantic partnership and Eastern-Western energy-transit opportunities.

    So this is – in a nutshell, I spoke for some 25 minutes. I have to leave at 10:15, so we have plenty of time for your questions.

    MR. WILSON: All right, thank you – thank you very much for that very interesting and helpful overview. Let me take the moderator’s prerogative of asking a first set of questions – and I want to really key off of the last topic that you spoke about, the Karabakh negotiations.

    First question: A – an Azerbaijani scholar that I heard speak recently at a conference here characterized President Heydar Aliyev’s strategy, after taking office in the early 1990s, as one of setting priorities, and that – and that in this individual’s analysis, he gave really the priority to Azerbaijan’s energy development and its energy connections with the West, and at least implicitly, gave the Karabakh issue a second standing as a – as a priority to resolve, one way or another, for Azerbaijan for a certain period of time. So I’d ask, do you agree with that? Is there anything you’d like to add to what you said earlier?

    Second, as you noted, the Minsk Group negotiations – negotiations over the Karabakh conflict – have dragged on and on and on. And you and I discussed this many times when I was serving there. When I arrived in Azerbaijan in 2000, this was still sort of a relatively fresh conflict. The negotiations had only been going on for eight – I guess for eight years or so at that point. It seemed – it – we had – we had an attitude in the United States government, certainly – and I think this was shared in both Baku and in Yerevan – that things were going to get resolved, that this was going to achieve some breakthrough. Twenty years on, that seems a lot less obvious.

    And so my second question is, is there – is Azerbaijan looking at, or should Azerbaijan consider, a change of strategy on the Karabakh issue? And if so, what might that be a strategy that – to try to get out of this endless stalemate that serves – realistically serves neither the interests of Azerbaijan or of Armenia?

    MR. AZIMOV: Well, in order to answer your first question, I agree with the last conclusion but I disagree with the reasonability behind. And in order to explain the reasons of disagreement, I would just refer you to those events of ’94 – probably beginning with ’93 when, in October, the last portion of territories of Azerbaijan in this area composing almost 20 percent have been occupied during a visit of Margaretha af Ugglas, minister of foreign affairs of Sweden, in her capacity as chief – chairman in office of CSCE in Baku and the region that time.

    Well, President Aliyev, being one of probably the most eminent statesmens in the history of not only Azerbaijan, he would of course consider that time with a sense of responsibility – first of all, the necessity of restoring territorial integrity – and therefore, some efforts have been undertaken – caused by his predecessors, by the way – but he was continuing with efforts until May 1994.

    So I wouldn’t simply reject or falsify the history, saying that Heydar Aliyev – once he came to power in Azerbaijan, back again in 1993 – he admittedly changed the strategy. No. There were military activities; there were efforts aimed at restoring territorial integrity; and Heydar Aliyev could not do otherwise.

    It was a most admitted, expected reaction – although he came in a different starting positions. Army was weak, and he – with all his abilities of a manager, of an organizer, of a mobilizer – was trying, in a short period of time, to beef up some portions, some segments, some people – arrange some experts and arrange some command structures – providing certainly some support to those people through political efforts, but also looking for financial resources, et cetera. So he was very limited and constrained in terms of resources, and he was working under huge time pressure

    That was going on until spring of ’94, when, at the same time, he took a decision – and very firm, at the same time, difficult decision. I have been in this – in his office during that night when he decided to go tomorrow to Brussels to join PFP, Partnership for Peace program, and to sign their framework document in the headquarters of NATO, and to meet with NAC, to speak at North Atlantic Council.

    That was a decision confronted by some, and until midnight he was receiving calls urging him not to do that. He did not change, because he never changed his decisions once taken. He would take time to work on a decision, but decision taken by him, I think, obviously, was someone – something he was convinced in. And therefore he was following that.

    The decision taken by the president to join PFP was implemented on 4th of May. Immediately after 4th of May, situation in the conflict zone deteriorated – as much as, on 12th of May, President Aliyev took decision to declare cease-fire. I wouldn’t dwell on the reasons. You may elaborate yourself.

    But then on 20th September, he signed the biggest and most important – strategically important energy contract – oil contract of the century.

    So this is a sequence of events. This sequence could not be changed. This is how the things work in this region. This demonstrates connections between security orientations, energy policies and conflict connections to all this. This demonstrates that the arguments of the opposite side, that there is issue of defendants of human rights or whatever rightful self-determination are false.

    The major nature of that conflict is geopolitical, and the Armenians are being used, or they allow them to be used by someone, to get their own smaller portion of interest in a larger fabric of geopolitics where they – usually skillfully as their history shows – skillfully tweak in these elements into this fabric – the smaller interests into larger fabric of geopolitics. So this is how it worked, at least to – (due ?) to my knowledge.

    On your second question, could you remind –

    Q: The change of strategy.

    MR. AZIMOV: Well, change of strategy. We actually are based on international law. We do not see any opportunity to change a position which is based and proceeds immediately from the principles of international law, which are based on recognition of territorial integrity and at readiness of Azerbaijan to provide self-rule for both communities of Karabakh region – Armenia community and Azerbaijani community.

    At the same time, I’d like to draw your attention to the fact that while and until Armenia recognizes Azerbaijan’s territorial integrity, naturally Azerbaijan will stand on the same position. So this is – this is fire backing – or backfiring Armenia as well. They should be quite cognizant of that.

    On the side of strategy, should we change our approaches in how implementing the position of Azerbaijan? Well, we follow the advice of international community in this case. We have been truly members of the Minsk Group under the mandate of OSCE, confirmed by UNSC resolutions of 1993. This is the hierarchy for us. And I don’t see any reason to reconsider or to change the structure.

    The matter is how countries use the structure, how they behave. The Minsk Group itself is not a problem. The Minsk Group itself is very good format. I remember how Georgia was trying to establish an institution which would be multinational. You had, in a time, you remember better than me, a group of friends – (inaudible) – friends of secretary general, and Deeta Borden (sp) from Germany was working there providing you with a good piece of paper on allocation of some competences of power between Scumia (sp) and Tbilisi. What happened with that paper? The paper was good; it was not bad. But what happened with that? Where are they today?

    I know also that our Moldavian friends – I don’t know if anyone here who’s from Moldova – but our Moldavian friends are taking huge efforts to maintain this international format for negotiations. We do have it; no reason to change.

    On the other hand, the Minsk Group itself is being squeezed, downsized on purpose and deliberately by three co-chairman who would act as chef in the kitchen, keeping all guests out and letting them in only when the cook is ready and the dish is on the table – in a way informing them of what do they think.

    Yesterday, I read the piece – a piece of Bernard Fassier. Well, I understand that now he’s resigning from his position as co-chairman of the Minsk Group, and therefore he’s so lucky and comfortable, and he’s so nice, he’s so generous in spreading different statements to all sides. And being in Yerevan he says something what comes across and against totally to what he has said to us in Vilnius a week ago, against what Ministers Lavrov, Juppe and Hillary Clinton agreed in Vilnius – totally contrary to what they have put in the declaration – the declaration of Vilnius ministerial meeting on NK conflict. I would go in details of that, if time permits, but Bernard, with his usual tricky sentences, went on explaining to Armenian public in Yerevan that those principles actually are remaining in all versions on the table, saying that there are Madrid 2007 principles, also there are different versions of Madrid 2007 and all of them are on the table. So what a thing Bernard leaves after himself, or is that a way of behavior of – throwing back responsibility from his shoulders and whatever happens after me I don’t care?

    So this is the case of a – of a ridiculous approach to the issue. I wouldn’t say names, but some big bosses coming to Baku after years and years of being responsible for these issues, leaving the office of President Aliyev would ask his colleagues, shortly just dropping that over the shoulder, give me a file on NK.

    If you come to the region, if you come to see the president, if you come to talk to him and you dare to take his time for NK conflict, the most important issue of the South Caucasus, which actually matters, the whole strategy of the South Caucasus now, couldn’t you spend some more time in reading before and not asking your (turtles ?) back – on your back to give you some files on NK after the meeting. Ridiculous.

    So this is what should be changed, not the Minsk Group format – it’s good. It’s good because we have interested parties there. We have Armenians and Azerbaijanis from Karabakh region comfortably fitting, formed and put into the format of the Minsk Group, giving them an opportunity to participate there.

    At the same time, this group is multinational with European and regional powers and players in it. So I wouldn’t change that. I wouldn’t change also the basis of their resolutions of 1993. What a reason to reconsider1 I wouldn’t change principles of Helsinki Final Act, which have been shaped by experience and wisdom of the whole European leadership of 1970s.

    So the strategy of Azerbaijan is, we develop our 80 percent and we shall make 20 (percent) back. Whatever ways for that, it seems to me that Armenia has to reconsider the strategy, because from my point of view, even with all difficultly and with all challenge that I take on my shoulders trying to think for them, I would – I would actually consider that as a huge national tragedy when half of population from Armenia is leaving the country – is fleeing from the country for the best – say, to Russia, West Europe, elsewhere, doing actually usual Armenian business – migrating. But at the same time, 30,000 Armenians remaining in Karabakh still pretend for something what cannot be considered as serious.

    So we in our strategy, supported by some regional countries, supported by the majority of European countries, and supported by majority of U.N. members, we suggest very simple solution: communities will get back to the Karabakh region; they will be guaranteed under international observation. Armenia will be benefitting from economic cooperation if Armenia behaves well. Ticket to the train should be bought. You cannot get on the train illegally. And nothing is for free of charge. No lunch is free of charge.

    Then the thing about the position – position of Armenia, currently as I see it, is based on rejecting Azerbaijanis from return to NK area itself. I’m not speaking about surrounding areas, but return of Azerbaijanis to NK area. For Azerbaijan, this is the only guarantee of a future objective solution of a status. Both communities of NK should be able to participate in this process.

    And this is not a way acceptable for any European nation to have a fait accompli-based solution with monoethnic society while the other party’s expelled – based on that, shaping a political decision, manipulated through single majority voting by a monoethnic society based on fait accompli. This is the thing which I see in their position, and I don’t see any chances for Azerbaijan to accept it. So return of Azerbaijanis is one issue.

    Second, Armenians under the pretext of corridor, taking that as wide as possible, try to maintain unilateral exclusive control over the – (inaudible) – area. That also in complex – in combination with the previous position on denying or rejecting the return of Azerbaijanis to NK tells me, with my 22 years’ experience of this thing, that they – what they have in mind is not any kind of cooperation of Azerbaijanis and Armenians in Karabakh. They have in mind just a separation of this, excluding any possibility for Azerbaijanis and Armenians for living and working together in Karabakh, so denying any chance for Azerbaijani central government to exert cultural, economic and political presence in Karabakh and at the same time, maintaining control over Lachin area by virtue, under the pretext of corridor – trying then to connect Karabakh to Armenia by this de facto fait accompli-based development.

    These are two major issues. There are remaining ones. Remaining are like when Azerbaijanis should return back? What kind of equality between Azerbaijanis and Armenians will be provided when Armenians reject this equality, and they try to insist on current de facto situation there to be recognized as the (Euro ?) situation.

    And also they try to keep territories of Kelbajar and Lachin, as they say, besides corridor areas – noncorridor parts – under the hostage control until they figure out what kind of favorable political solution they can get from Azerbaijan. This way such a strategy will not work. Simply, there will be no solution then to this conflict.

    And finally, what Armenians are trying to do, they are trying to do – to play with us a geopolitical game, like using the matter of security concerns of populations. They try to increase the demand for the presence of enforcement-mandated forces – not peacekeeping forces but enforcement mandate-based forces.

    And this is a very tricky game, because they realize that the only one way to – let’s say to control the situation with strong Azerbaijan economically developing, et cetera, with population of close to 10 million, while they are shrinking down to I don’t know what limits, they would have probably another player coming inside the conflict area and taking a firm position. And that player should not be multilateral, therefore OSCE forces are being dropped.

    And one of countries opposing the ’92, ’94 decisions of OSCE summits now is Armenia – strongest and publicly opposing these decisions. And the reason is because they are not interested in multinationality. They are interested in something domestically cooked. I won’t go into further details, but I think you understand me.

    So this last position – last element is actually coming not as a total new element. We have been observing these attempts in the past, in 1994 else – or yet in other years as well. But nowadays, with all these observations and OSCE, I am actually quite tensed about it.

    MR. WILSON: I think that was a helpful elaboration on the Karabakh issue. Maybe Rich Kauzlarich and then Ambassador Malis (sp).

    Q: Yeah, I want to pursue this NK issue, and I do it with some hesitation, because I learned two things in my time in Baku. First, don’t play basketball with Araz Azimov – (laughter) – and never try to argue the U.S. position on CFE flank agreements because you’ll lose. (Laughter.) Yeah.

    But seriously, I’d like to come back to this NK issue. I thought I was going to agree with you until you made your elaboration, because I think the time has come, really, to look at the whole Minsk Group process and ask: Is this the basis for going forward – not because it’s failed, but because it doesn’t provide the conditions under which you will lead to a negotiated situation.

    So I would suggest two things. One, Armenians and Azerbaijanis have to find a way to talk to each other independent of the Minsk Group because we’ve become – the international community – the excuse for not making progress.

    Second thing, you need to change the game in a very dramatic way. And one way you could do that is to allow Turkish and Armenian opening to continue so that you create a new set of relationships that would increase the confidence within the region of a regional solution, and have Turkey play the kind of role that I think many people believe it should in terms of helping resolve this conflict.

    MR. AZIMOV: Well, what was the first one? I’m sorry. What was the first element?

    MR. WILSON: Direct Turkish – or –

    MR. AZIMOV: Ah, yeah – no. Direct Armenian – Rich, a very short answer to that. Can you – can you find me – provide me a room screened (of/off ?) any influences to make Azerbaijanis and Armenians really talk to each other, as man-to-man they talk, without any outside influences? I don’t have such a high-tech to provide a screen – a shield against that.

    Nevertheless, a talk between Armenian president and Azerbaijani president is not a new thing. They talk to each other. They talk, but the way they talk is not really the major issue. They meet and they talk bilaterally, sometimes together with President Medvedev or sometimes in a bilateral way. But I agree with you, something has to be brought in. But it seems to me that the Minsk Group has to look at the issue in the real format of the Minsk Group, real format of the Minsk Group.

    On the second issue, with Turkey and Azerbaijani-Armenian conflict, first of all, Turkey is – it’s up to Turkey to decide on what they are – they are going to choose as their priority. On my side, from my point of view, Turkey is a truly regional power. Turkey has many reasons to be interested in, and Turkey has many opportunities to exert the influence and to provide contributions.

    But on the other hand, it seems to me that it’s quite strange game where Armenians talk about desire to cooperate and at the same time continue their anti-genocide campaign. And yesterday or this time in France, some – a decision should already – is taken, which will probably affect future abilities of Turkey to find a game changer, as you hope.

    At the same time, probably we need some (sincerity ?) from Armenia. Where they go? Do they continue this exporting instability in neighboring countries practice, with Azerbaijan in Karabakh and then in the Nakhchivan, maybe, with Georgia in Javakheti, with Turkey on genocide issue trying to exert these influences?

    And that issue which Ross referred to, the return of Ambassador Matt Bryza from Baku, I don’t know whether he already has received this instruction to pack back again and to buy a ticket to Washington. But if he returns back, that is another bad indicator of these developments because that would strongly urge all diplomats of the United States, in terms of their conduct of services, whose foreign policy they have to implement – U.S. presidents or some senators or some lobby structures gaggling around the Congress. So this is the question – these are all the questions of real intentions and games which sometimes are very bad.

    On Turkish-Armenian rapprochement, I’ve been quite engaged in consultations with Turks after these issues came up in 2009 April, and I think they are quite convinced in the necessity of getting a progress in Azerbaijani-Armenian conflict. On the other hand, I don’t think that anyone in Turkey or in Azerbaijan will support any other decision. And this is not because of simply a position of the society; the nature of the issue demands that.

    Opening of the borders, we are not against that. We even have provided kind of a road map project where we could have territories withdrawal combined with a border re-openings and roads restoration. Such a road map can be easily drafted in 15 minutes for you. I can do it. But can you provide me Armenian agreement on that? That would be a normal approach of a country which would be interested in building neighborhoods and normally – normalizing relations with its neighbors. And there are very easy solutions.

    We shall support a leader of Armenia who will be doing this. We shall support him, despite all – as he sometimes threatens, pressures from the political powers inside the country and outside the country. Both Turkey and Azerbaijan, he will get the biggest and strongest supporters on his side if he takes this courageous decisions aimed at really honest and open, sincere game to withdraw from territories, to restore communications, and to allow others to take the reciprocate states – steps to change the state of affair. For a reason, we expect only Azerbaijan and Turkey to do something, saying: (We ?) – I don’t mean myself, but in general.

    MR. WILSON: Let’s take a couple of comments and then – and then ask Ambassador Azimov to respond. Ambassador Miles and then Tom de Waal, and then we’ll come over to this side.

    Q: Thank you very much. Good to see you here. In Washington, I don’t sense a feeling that there is any danger of imminent hostilities over the Nagorno-Karabakh situation. But I must tell you that there is, I sense, an increasing concern over the logic of the situation, which might lead to such a thing in the future. You have an intransigent attitude on the part of the Armenians, especially in Nagorno-Karabakh itself, almost a feeling of cockiness – if hostilities come, you know, we will – we will defeat the Azeri forces. And in Azerbaijan, you do have continued improvement of the Azerbaijani Armed Forces. You have superior financial resources, and the military is in a considerably better situation than it was the last time hostilities were involved. So there’s a concern over that, and I would just appreciate your comment about that.

    And then a slightly related question, you mentioned getting the Armenians and the Azeris together in a – in a room free of outside influence. I expect that is totally impossible. We’ve tried virtually everything to bring to the two together. Now, you mentioned the Swedish foreign minister back in my day, and I recall one of the comments she had after a visit to the region – if the two parties are not willing to work this out together, there’s very little the international community can do to help them do it. But one power that has not been tried yet to help bring the two of you together in some kind of a forum or discussion format is Iran. Iran does have good relations with both Azerbaijan and Armenia, and it is a regional power, more or less disinterested. You could write a whole article about this, of course, including our own relationship with Iran and Russia’s relationship with Iran. But I’ve wondered if you’ve given any thought to the possibility of Iran playing some kind of a positive political role, in addition to the economic role which they already play.

    MR. WILSON: (Off mic) – Tom de Waal come in, and then (you can ?) respond.

    Q: Working? Yes. Good to see you here. I have a question about the cease-fire violations on the line of contact, which obviously people are still dying, unfortunately, on the line of contact, even civilians, as you know, this year including Azeri civilians. March this year, the three presidents met in Sochi with President Medvedev, and there was a statement about them setting up a mechanism with Ambassador Kasprzyk to investigate these cease-fire violations. I believe the State – the Minsk Group co-chairs sent some proposals this fall to both the – Presidents Aliyev and Sargsyan. And I want to have – hear your response to what can be done to set up that mechanism. Thank you.

    MR. AZIMOV: With pleasure. Well, first of all, on the role of Iran. Iran is a neighbor, of course. We have very different relations with Iran in many ways. I would say by one word, they are delicate relations. Our assumption is that Iran is quite vigorously economically cooperating with Armenia, having much more agreements with them than with Azerbaijan, and getting them more support in – sometimes support which is being used, due to our knowledge, in maintaining the occupation as well. So I wouldn’t say that Iran is that good partner in settling this conflict.

    At the same time, if you drop this idea in, then the best format following this logic would be Azerbaijan, Armenia, Russia, Turkey, and Iran – and no others. Or would United States come together at the table of negotiations with Iran? Negotiating what? Settlement of their – or their own relations. Seems to me that in a way, theoretically, this is an idea which we have to keep in mind, but practically we have a Minsk Group format, which I don’t see any reason now to change.

    With the second question given by Tom, first of all, you said “line of contact.” Indeed, there are some 40 meters in between positions of both parties in some places. In some, there are 800 meters or 700 meters. So soldiers on both sides may wish good night to each other with no walkie-talkie communications on that. They will hear each other. Under such circumstances, of course, any kind of normal regime for maintaining of cease-fire is not applicable. At the same time, while there is no progress in the settlement of conflict, I wouldn’t see any opportunity for presence of observers or presence of larger numbers of forces, because that is a classic model of freezing the situation in the conflict zone – in any conflict zone.

    But you know, Thomas, that the – this thing cannot be considered as a substitute to negotiations. And if you get some more increased presences on the line of, what you say, contact – I would say confrontation and someone would say cease-fire, and, in general, this is LOC. So on LOC, you have, for example, some trenches, some minefields, some forces on both sides, and there is sporadic violation of cease-fire. Co-chairman tried to contribute, first of all, by inviting parties to withdraw snipers, and that idea was so liked by many who have no idea of what sniper means actually. A sniper is an invisible tactical unit, a soldier on his own tactical mission subordinated to one commander, getting his missions exactly from him, and being invisible. So he is not going to violate a cease-fire on a daily basis. There’s no need for keeping snipers for that.

    On the other hand, I would qualify cease-fires – cease-fire violations as sporadic ones, chaotic ones. Withdrawal of snipers – once they are invisible, how can you check it? And how can you trust the other side say – having – which would say that they have withdrawn these snipers? How to implement this invitation by the co-chairman? But they have a lot of initiatives of this kind. Once Ambassador Kasprzyk suggested us to fight rats on both sides of the LOC, and I just responded: How can I fight Armenian rats? Or if Armenian rats pass through LOC, how can I distinguish Armenian rats from rats from Azerbaijani rats? Which language do they speak? And what is the purpose of providing an initiative which actually is useless when there is no progress in the settlement? Let’s make negotiations. Let’s make settlement progress. And cease-fire violations will be dealt with accordingly.

    Then, co-chairman came with a new bright idea on investigation of incidents. Tell me, do we have a measurement of an incident different from a violation of cease-fire? What kind of measurement you may have? A number of dead or a number of bullets? Kasprzyk many times was on the line when a bullet was just passing above his head. That does not add to his image of a brave man, but that says another thing. He never dared to say from which direction a bullet came, although he heard it, but he never reported it back. And can you imagine Kasprzyk with his six field officers running through 700 somewhat kilometers long LOC, all the day and night, registering and recording all sounds of those bullets, having those incidents to be investigated then. How?

    So finally, those considerations unfortunately taken by co-chairman after the initiative was so propagated, even at the highest level, have recognized, actually, limited chances for implementation. And in Vilnius, after long discussions in this ministerial declaration, they have put this formula like it’s not no more investigation of incidents; it’s investigation of cease-fire violations. And opportunities or possibilities for implementation of this or elaboration of this should be further duly discussed. So you may understand that in a diplomatic language, that means something different.

    On the other hand, again, back again to this issue, we cannot accept any increase of observation without any progress in the settlement. We shall be in need for OSCE presence when you have a concluded agreement. If we don’t have it, then we cannot adopt anything, which will bring further on this situation to refrigerator.

    Q: Thank you.

    MR. WILSON: I’m afraid I’m going to have disappoint people on this side. Ambassador – Azerbaijan’s ambassador is reminding us that there’s another appointment at the Pentagon. This has been a very helpful discussion, I think, both in terms of going back over a little bit of the history and laying out Azerbaijan’s views on kind of where some of the key issues stand today, and I think that’s very helpful.

    I want to thank all of you for being with us and closing out what’s been a very busy year for the Atlantic Council. A special thanks to Herpreet Singh, who I think has just walked out – oh, he’s right here – for helping us to organize this. Thanks to Anna Borshchevskaya, assistant director of the Eurasia Center, for her work in arranging this. Many thanks to Azerbaijan’s embassy and, of course, to my good friend, deputy foreign minister and ambassador of Azerbaijan, Araz Azimov. Thank you all very, very much.


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  • BSEEF 2011 - Opening of the Forum - 11/17/11

    The Atlantic Council Of The United States

    Black Sea Energy & Economic Forum 2011

    Opening of the Forum

    Frederick Kempe,
    President and Chief Executive Officer,
    Atlantic Council

    Mirko Cvetkovic,
    Prime Minister,
    Republic of Serbia

    Recep Tayyip Erdogan,
    Prime Minister,
    Republic of Turkey

    Taner Yildiz,
    Minister of Energy and Natural Resources,
    Republic of Turkey

    Rifat Hisarciklioglu,
    Union of Chambers and Commodities Exchanges of Turkey

    Location: Istanbul, Turkey

    Time: 9:00 a.m.
    Date: Thursday, November 17, 2011 

    Transcript by
    Federal News Service
    Washington, D.C.

    FREDERICK KEMPE: If you could all take your seats please, we're about to get started.

    Ladies and gentlemen and distinguished guests, I'm Fred Kempe. I'm president and chief executive officer of the Atlantic Council, and it's my great pleasure to welcome you to the 2011 Black Sea Energy and Economic Forum.

    We convene for this, the third forum, at a time of turmoil and uncertainty. Financial crises, sovereign debt challenges in Europe and the United States and the developed and the developing world’s economic challenges have developed in ways and with a persistence that we could not have anticipated when we met here a year ago.

    Even less anticipated was an Arab awakening that began with a market vendor's self-immolation in Tunisia. Popular revolts and their reverberations all across the broader Middle East remain unfinished. Many have really only just begun. And they will have significant implications for all of us, particularly in this region.

    A historic diffusion of power is under way in the world, as is a relative shift of prosperity, growth and perhaps influence. There are some disturbing trends, an age of uncertainty, some people say; there are some very encouraging trends, and an age of individual empowerment, the rise of a global middle class, and one has seen that nowhere more prominently than in Turkey.

    That we are here in Istanbul reflects the Atlantic Council's commitment to transatlantic engagement with the 30-odd countries represented at this forum and to working with the region's leaders on ways to address key issues and how one can more deeply, more effectively, and more prosperously cooperate with one another in the Black Sea-Caspian region to promote freedom, security, stability and prosperity in those regions and beyond.

    We convene in Istanbul for the second year in a row, in light of Turkey's increasingly important position in the region and the world. In a moment of instability in this region, Turkey is an anchor of stability. In a moment of great transformation in the region, Turkey may not always be a model, but it is certainly an inspiration. Turkey has a key role in the transit and trade of energy from the Caspian Basin in Iraq to Europe and other international markets. In commerce, Turkish firms are active and energetic investors and market makers throughout the Black and Caspian Seas region and in the Middle East, North Africa and elsewhere. At a time when growth seems anemic in much of the world, the Turkish economy is vibrant. And in politics, Turkey's role as a shaper and influencer of international affairs is growing in the Balkans, in South Asia, in the Middle East and North Africa.

    So convinced are we of Turkey's importance that the Atlantic Council hired as the director of our Dinu Patriciu Eurasia Center our former U.S. ambassador to Turkey, Ross Wilson, to be its director. And we also opened up our first office ever outside the United States in Istanbul last January, and we are pleased that Zeynep Dereli, a woman with an outstanding background in both the energy business and politics, represents us here as director of this forum.

    The Atlantic Council thanks each and every one of you for accepting our invitation to attend this year's forum. We are especially grateful to the many firms and other organizations noted in your programs that have extended financial and practical support to the forum, who have partnered with us on behalf of this initiative.

    I do also want to express my particular gratitude to Prime Minister Erdoğan, and of course to Energy and Natural Resources Minister Taner Yildiz, and the entire Turkish government for their strong support of this forum, both this year and last year, and we hope very much into the future.

    We know this is a challenging time for this country and the region. Our hearts go out to the families of those who lost loved ones during the recent earthquakes and their aftershocks in far eastern Turkey. They, and this country as a whole, should know that the international community is with them, and I hope our presence here today in some small way also contributes to that.

    Now, let me do what I'm really here to do, which is to introduce the chairman of the Atlantic Council. He is a great American; he embodies for a lot of us at the Atlantic Council what we stand for: the Atlantic Council chairman, Senator Chuck Hagel. Senator Hagel served for many years in the United States Senate. As a member of the Committee of (sic) Foreign Relations, he was a regular visitor to most, if not all, of the countries represented at this forum, and his office was a regular stop for any leader from this region going to the United States looking for clues as to American foreign policy and relationship with this region.

    Senator Hagel presently serves as chairman of the President's Foreign Intelligence Advisory Board. He's on advisory boards at the U.S. departments of Defense and Energy. And he serves as a distinguished professor at Georgetown University School of Foreign Service. Please join me in welcoming Senator Chuck Hagel. (Applause.)

    CHUCK HAGEL: Fred, thank you. Good morning; welcome.

    I add my thanks to each of you who have committed a couple of days to this conference. Thank you. Also, I add my thanks to what Fred has expressed on behalf of the Atlantic Council to our host, the Erdoğan government, the people of Turkey, certainly the people of Istanbul and all those who have facilitated the fact that we are back and are proud to be back in Istanbul for a second annual Black Sea Economic and Energy Conference.

    And as Fred said, it is for the reasons that Fred noted and other reasons you will hear throughout the day and tomorrow as to why we chose this venue once again this year for some of the most pressing issues that, in fact, are realigning world affairs, influencing early 21st century geopolitics in ways that are unprecedented. And as has been noted before, we are living at a time truly historic from every perspective, but probably none more so than the fact that we are living at an unprecedented time in the diffusion of economic power, which is driving so much of the influences that are realigning alliances and relationships as we begin this early part of this new century. None of those alignments and relationships are more important than those in this part of the world, and Turkey represents very much the anchor of that dimension.

    I also wanted to note, in case you were not all aware, of the fact that the United States ambassador to Turkey, who is an old friend, who is one who is no stranger to this part of the world, Ambassador Frank Ricciardone is here with us for this conference.

    And Frank, thank you. I know you have many important duties to attend to. We are grateful that you would take your time to spend with us, as is the case with many other not just American senior officials but officials from other governments. So thank you all very much.

    Now, let me introduce the organizer of this conference. Fred mentioned Ross Wilson before. Ross Wilson has been for the United States government one of the preeminent Foreign Service officers, selfless public officials over his 30-year career in the Foreign Service of the United States government. As was noted by Fred, he is a former ambassador here to Turkey, has many friends in this audience and throughout this country. He was also United States ambassador to Azerbaijan, held many key posts over his years. Currently, one of the responsibilities he has with the Atlantic Council is director of our Dinu Patriciu Eurasia Center, as well as being called upon to attend to other important issues, and not just within the Atlantic Council but in the current administration that is also part of his overall portfolio of responsibilities.

    Ross has done another magnificent job of putting together, we think, what is going to be one of the best conferences the Atlantic Council has hosted over the years, and I hope after your two days here you will agree with that as well.

    Ladies and gentleman, Ambassador Ross Wilson. Thank you. (Applause.)

    ROSS WILSON (Director, Dinu Patriciu Eurasia Center): Thank you very much, Senator Hagel, for those very kind words. Please let me add my own welcome to all of you. I am committed to this forum because I care deeply about the success in this part of the world, and because, of course, I love coming back to Turkey after my tenure here.

    We envision this forum as an ongoing set of activities, not just an annual conference, intended to promote cooperation and integration. The Patriciu Center team and I welcome your ideas and input on how to accomplish those objectives. We look forward to working with our many partners in this room over the coming year.

    It's my pleasure to welcome here Ümit Boyner, the president of the Turkish Industry and Business Association. TÜSİAD is among the most influential independent business associations in Turkey. It plays a particularly active role now in working to expand trade and investment relations with a number of countries, including the United States, and we were pleased to welcome Mrs. Boyner to Washington just a few weeks ago. TÜSİAD will honor the forum by hosting later today our luncheon in honor of its 40th anniversary. Thank you very, very much for this.

    Please join me in welcoming TÜSİAD President Ümit Boyner. (Applause.)

    ÜMIT BOYNER (President, TÜSİAD): (In Turkish.)


    MR. WILSON: Thank you, Mrs. Boyner.

    It's now my pleasure to introduce Rıfat Hisarcıklıoğlu, president of the Union of Chambers and Commodity Exchanges of Turkey. TOBB's membership here numbers some 1.3 million businesses and other organizations, and this gives TOBB and Mr. Hisarcıklıoğlu a major role in shaping Turkish policy on commercial, economic and other matters.

    Under Rıfat-bey’s leadership, TOBB played a crucial role in confronting the effects of the global financial crisis in Turkey, through initiatives aimed at stimulating domestic consumption at a time when foreign demand had dropped significantly. TOBB is one of the forum's principal sponsors and partners, for which we are very grateful.

    Please join me in welcoming Rıfat Hisarcıklıoğlu. (Applause.)

    RIFAT HISARCIKLIOGLU: Mr. Ambassador, when you leave Turkey, 100,000 (enterprise?), that includes our members. Now the members is 1.4 million.

    (In Turkish.)


    MR. WILSON: Thank you very much, Mr. Hisarcıklıoğlu.

    Our next speaker is a particular friend of mine, of the forum, and of the Atlantic Council. Taner Yıldız became Turkey's minister of energy and natural resources in April 2009. An electrical engineer by training, Minister Yıldız has served as a member of the Turkish Grand National Assembly since 2002. In his present position, he is the key player in shaping the Turkish government's energy policy, including with respect to a new southern corridor gas pipeline that we will be discussing here in the next two days, the development of a new Turkish nuclear power industry, as well as new wind, solar, geothermal and hydro resources, and the privatization of the power sector.

    In two and a half years in office, his performance has been impressive. Minister Yıldız, as I've noted, has been a friend and supporter of this forum since he attended its first gathering at Bucharest in 2009.

    Mr. Minister, we are deeply grateful for the advice and assistance and other support that you and your minister have given and helped to mobilize toward making the Black Sea Energy and Economic Forum a success.

    Please join me in welcoming Minister Yıldız. (Applause.)

    TANER YILDIZ (Minister, energy and natural resources): (In Turkish.)


    MR. WILSON: Thank you very much, Minister Yıldız.

    It is now my pleasure to introduce Deputy Prime Minister Ali Babacan of the Republic of Turkey. Very few, perhaps no other finance minister in Europe can claim a record of success over the past decade as impressive of that of Turkey's, in which Ali Babacan has played a decisive role, first as minister of state for the economy in 2002 to 2007, and since his appointment as deputy prime minister in April 2009, with a two-year stint as foreign minister in between. A Fulbright scholar, Ali Babacan is a graduate of Northwestern University, of Northwestern University's Kellogg School of Management.

    Mr. Minister, thank you for your friendship and for your support of this forum. We are very pleased to have you with us again this year.

    Please join me in welcoming Deputy Prime Minister Babacan. (Applause.)

    ALI BABACAN (Deputy Prime Minister, Republic of Turkey): (In Turkish.)


    MR. HAGEL: Thank you. Mr. Babacan, thank you. We are always grateful to hear from you. And your presentation last night at dinner was particularly welcome and insightful.

    Ladies and gentlemen, I have the honor and the privilege to introduce you to the prime minister of Turkey. It has been said here this morning and it has been many times noted over the years that Turkey is the democratic and economic anchor of stability in a very important region of the world. One of the main reasons that is so is because of the leadership of Prime Minister Erdoğan.

    Prime Minister Erdoğan's government came into existence in early 2003. On a personal note, in December of 2002, then the chairman of the Senate Foreign Relations Committee, now Vice President Joe Biden and I were traveling around the Middle East for a 10-day visit. And I believe it was then-Chairman Biden and I who were the first American officials to greet the new incoming Erdoğan government that was about to take power after an historic election that had occurred a couple weeks before Biden and I arrived in Ankara.

    This was the beginning of my understanding of what was about to take place and truly transform a great culture, a great country in many important ways. For the West, Turkey has been one of those indispensible allies since the early 1950s as one of its most reliable NATO partners, a country with relations with its countries all over the region, positioned in a critically important way for not just the geopolitical realities of our time but the two main issues that we explore in this conference, energy and economics. Driving these alignments and realignments and new geopolitical dynamics that influence the early part of the 21st century are represented here in this region. And none represent it in a more comprehensive, insightful, forceful way than here in Turkey under the leadership of Prime Minister Erdoğan.

    Ladies and gentlemen, we have thanked the prime minister and his government and the people of Turkey this morning. But once again, on behalf of the Atlantic Council let me thank the prime minister for taking time this morning as well as many of his distinguished members of – leading members of his Cabinet and those who are changing a world that is not just sometimes unpredictable but many times dangerous and volatile. And for your leadership we are grateful.

    Ladies and gentlemen, Prime Minister Erdoğan.

    RECEP TAYYIP ERDOĞAN (Prime Minister, Republic of Turkey): (In Turkish.)


    MR. HAGEL: Prime Minister Erdoğan, thank you.

    Ladies and gentleman, now allow me to introduce the prime minister of Serbia, Mirko Cvetković.

    We are most grateful, sir, that you are with us this morning. The prime minister's government took effect in Serbia in 2008. Under his leadership, calling upon his extensive experience in his country's government, Serbia is well on its way to integrating itself into the European economy, playing a significant role in helping stabilize his region of the world. Of course, energy, like all parts of the world and all economies and all nations, plays a significant part and has a tremendous influence on the future of his country.

    We are particularly grateful that he would make time and come to our conference this morning. Ladies and gentlemen, the prime minister of the Republic of Serbia, Mirko Cvetković. (Applause.)

    MIRKO CVETKOVIĆ: Dear Prime Minister Erdoğan, esteemed excellencies, ladies and gentlemen, it gives me a great pleasure to be here in Istanbul today and to address you at the Black Sea Energy and Economic Forum.

    At the outset, I would wish to express my gratitude to all those who have organized this forum, which comes at the right point in time. The security of energy sources and supply routes is among the most important issues for the governments of the countries in the region, international export community, and politicians. Severe economic crises of international proportions has not diminished the global significance of energy security. And assuring accessible and reliable energy sources and security of supply are the necessary prerequisites for economic development. In the last couple of years, we have experienced fluctuations in energy prices, which had the strong effect on the national economies. All of this has once again brought the energy stability into the focus.

    On the other hand, the stability and cyclic changes, inherent energy prices on the global market, the drop in all-world demand due to the reduction of primary production and financial constraints, as well as regional problems in security of supply and delivered quantities of energy have all given the particular issue not only an economic but a political dimension too. Insufficient energy interconnectedness between neighboring countries, dated or nonexistent transmission infrastructure, and lack of natural interconnections are all issues which have surfaced and gained particular significance as the need for strengthening regional dialogue and developing energy networking mechanisms grows.

    This is the reason why it is important to define energy strategies, which would reinforce the strengthening of international energy capacities, turning to renewable energy sources, increasing energy efficiency, energy sources diversification, and energy transformation of routes as its top priorities. As a member of the European Energy Community, Serbia is firmly committed to giving its full contribution to regional energy networking.

    For this reason, Serbia initiated the development of the Regional Energy Development Strategy last year. The proposal met with approval of all contracting parties, and in 2011, the Energy Community Secretariat has developed a document containing basic guidelines for the development of the regional strategy. I would wish to remind you that the main goals of the Energy Community are establishing an integrated energy market in the region of Southeast Europe, thus enabling closed-border trade and links with the international market of the European Union, strengthening security of supply, attracting investments into power generation sector, rehabilitation and construction of energy transmission network, and improving environmental protection.

    By signing the Agreement on the Energy Community, the countries of the Southeast Europe have confirmed the significance of establishing an integrated energy market as well as their readiness to jointly face challenges on the way to a full integration of the whole region into a single European Union energy market. The challenges include the following: strengthening institutional capacities, implementing energy market integration reforms, strengthening energy security, increasing energy efficiency, and environmental protection. The countries of this region have particular geostrategic importance due to the fact that they are located on the transit road between central Europe, Caspian Basin, and near east, which is critical for the construction of the European energy infrastructure.

    Serbia is strongly in favor of identifying concrete projects which would be implemented through cooperation between regional countries, such as the construction of reversible hydropower plants, interconnections between the Republic of Srpska in Bosnia and Hercegovina, Serbia and Italy renewable energy sources, installing telecommunication cables in parallel with gas infrastructure construction of regional gas storage facilities, and implementation of the South Stream project. Owing to its participation in South Stream gas pipeline construction project, Serbia now plays an important role and is gaining regional importance.

    The signing of the agreement with Russia for the (ratio?) which pertains to the construction of a section of the South Stream international gas pipeline through Serbia and the construction of Banatski Dvor underground gas storage facility has given Serbia a prominent place with growing responsibility as it is now part of the main transit route to the European market. At the same time, the development of the main gas infrastructure is an opportunity to engage economic service, providing capacities of the Republic of Serbia to enhance the growth of the national economy, reduce unemployment and strengthen the social component of market economy. This is yet another window of opportunity for Serbia to become a bridge between different countries which are not directly involved in the project, and to establish itself a valuable and a reliable regional partner.

    Being original center located at the crossroads of strategic energy and transportation routes, Serbia is open for participation in other projects and plans, geared towards strengthening security of energy supply, technological streamlining and expansion of transport and storage capacities, and regional networking. Increased interdependence between end users and producers of energy in Europe and Asia also requires that the governments of all the countries involved assume great responsibility, with the Black Sea region having particular importance.

    The energy potential of the Black Sea region has brought about the adoption of the EU strategy for the Black Sea by the European Parliament in January of this year. The objective of cooperation is to achieve sustainable production and consumption of energy in the region, which requires close cooperation between member states, multinational companies, and international organizations. The segment of an environmental protection which includes effort exerted towards finding alternative energy sources and reducing consumption should also be stressed.

    Serbia actively participates in the organization of the Black Sea Economic Cooperation, in particular with the Energy Working Group. In view of the significant energy potential of the Black Sea region, we intend to organize during our BSEC chairmanship starting in January and ending in June 2012 an energy-related ministerial meeting.

    I see this forum as well as the cooperation between our countries within the Black Sea Energy and Economic Forum not only as a mechanism for pursuing and strengthening our joint energy policy but also as yet another pillar supporting the development of long-term and friendly economic relations which are conductive to the stability of the region.

    Thank you very much. (Applause.)

    MR. WILSON: (Name inaudible) – Prime Minister Cvetković, other distinguished speakers, thank you very much for opening the 2011 Black Sea Energy and Economic Forum. Your remarks have helped set the stage for the next two days and given us plenty to reflect upon.

    To complete our opening ceremonies, we are very proud and honored to welcome here the Tekfen Philharmonic Orchestra. We're grateful to the players that I hope will be assembling now, to enter the orchestra's backers, especially to my friend – (name inaudible) – for making this piece of the forum available.

    Originally called the Black Sea Chamber Orchestra, this group was founded 19 years ago with the sponsorship of Tekfen Holding, with the aim of improving and enriching culture relations in the region. There are players originally from 17, now I understand 23 countries; each individual brings his own style and interpretation to the music that we will hear. We'll have a brief pause to let the group, let some of our distinguished guests step out, and to let our musicians come in. Thank you all very much for your participation this morning. (Applause.)



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